Exhibit10.2(b)
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment to Employment
Agreement") to the Employment Agreenient, dated August 1, 1990 (the "Employment
Agreement") and is entered into on September 25, 1996 by and among The Xxxxxx
Group, Inc., a Delaware corporation (the "Corporation") and Xxxxxx X. Xxxxx (the
"Employee").
WHEREAS, the Corporation and the Employee are parties to the Employment
Agreement dated August 1, 1990; and
WHEREAS, the Corporation and the Employee desire to amend the
Employment Agreement pursuant to Section 12.3 thereof in connection with the
Stock Purchase Agreement (the "Purchase Agreement"), dated as of the date
hereof, among the Corporation and 21st Century Communications Partners, L.P., a
Delaware limited partnership, 21st Century Communications T-E Partners, L.P., a
Delaware limited partnership, and 21st Century Communications Foreign Partners,
L.P., a Delaware limited partnership (collectively, the "Investors") and the
issuance of certain newly issued shares of capital stock of the Corporation to
the Investors as set forth in such Purchase Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained
herein and in the Employment Agreement, the parties hereto agree as follows:
1 Section 1. I of the Employment Agreement is hereby amended
by deleting the existing, language in its entirety and by substituting
the following language therefor:
1.1 The Corporation hereby, employs the Employee and
the Employee hereby, accepts employment from the Corporation
from a term continuing through and including December 31, 1999
(the "Term").
2 Section 4.1, Section 4.2, Section 4.3 and Section 4.4 to the
Employment Agreement are hereby amended by deleting the existing
language in its entirety, and by substituting the following language
therefore:
4.1 During the Term, the Corporation shall pay to the
Employee a salary at the annual rate of $251,740.80, which
shall be paid in equal monthly or more frequent installments
(the "Base Salary").
4.2 In addition to the Base Salary, starting with the
) year beginning January 1, 1997 and each year during the
remainder of the Term. the Corporation shall pay to the
Employee a Bonus at the annual rate of $60,000 (the "Bonus"),
which Bonus shall be paid directly to the Employee in cash in
one installment within a reasonable period after December 31
of each year; provided, however, that in the event the
Corporation has not for any year met the budgeted revenue
goals for such year established as hereinafter provided, then
(i) Employee shall not be entitled to receive any part of the
Bonus for such year directly in cash and (ii) if the
Promissory Note dated September 25, 1996 by the Corporation in
favor of the Employee in the original principal amount of
$2,375,500 is then outstanding, the Corporation shall offset
against the Corporation's liability to Employee under such
rate an amount equal to the lesser of (x) the Bonus and (y)
the outstanding principal of and accrued but unpaid interest
on such Note. Any such offset against such Note shall for all
purposes be treated as through it were a prepayment of such
Note by the Corporation. Employee shall negotiate in good
faith with the Corporation and the member of the Corporation's
Board of Directors who from time to time has been elected by
the holders of the Corporation's Series B Senior Cumulative
Compounding Convertible Redeemable Preferred Stock (or any
capital stock into which shares of such Preferred Stock may be
changed) to establish and budgeted revenue goals for each year
reasonably acceptable to Employee, the Corporation and such
director. which shall be reasonable, designed to link the
entitlement of Employee to the Bonus for such year to the
achievement of realistic and reasonable targets for growth in
the Corporations revenues from year to year during the Term.
3 The Employment Agreement is hereby amended by adding the
following Section 13.
13 Grant of Restricted Stock
13.1 As a reward for past, and an incentive for
future, employment performance by the Employee and for other
good and valuable consideration the receipt and sufficiency of
which is hereby, acknowledged, the Corporation is, effective
as of the date hereof, awarding to the Employee, upon and
subject to the terms and conditions set forth in this
Agreement, 8,831 shares (the "Initial Shares") of the Common
Stock, par value $.01 per share, of the Corporation ("Common
Stock"). As used in this Section 13, (i) the term "Restricted
Shares" will mean all Initial Shares and any and all other
shares of stock and other securities which the Employee later
acquires or has the right to acquire by reason of ownership of
or otherwise with respect to any Initial Shares or other
Restricted Shares, irrespective of the time and manner of such
acquisition, including, without limitation, any shares or
other securities (whether issued by the Corporation or
otherwise) acquired by reason of any split-up,
recapitalization, dividend, distribution, combination,
conversion or exchange of shares of capital stock or other
securities of the Corporation (or any other issuer), or
acquired by reason of any merger or consolidation of the
Corporation, any sale or other disposition of all or
substantially all of the assets of the Corporation (or any
other issuer) or any dissolution of the
Corporation (or any other issuer); and (ii) the term
"Restricted Share Distributions" means any cash or other
property, except stock or other securities, which the Employee
acquires or receives or has the right to acquire or receive by
reason of ownership of or otherwise with respect to any
Restricted Shares, including, without limitation, any cash or
other such property acquired or received by reason of any
event specified in clause (i) of this sentence.
13.2 If a Forfeiture Event (as defined below) occurs
at any time prior to the Vesting Date (as defined below), all
Restricted Shares and, subject to the last sentence of Section
13.3, Restricted Share Distributions held by or for the
account of the Employee or which the Employee has the right to
acquire or receive, and all rights and benefits of Employee
with respect to such Restricted Shares and Restricted Share
Distributions, automatically will be forfeited to and vest in
the Corporation. As used in this Section 13, (i) the term
"Forfeiture Event" means either (a) the termination of the
Employee's employment with the Corporation by the Corporation
for cause or (b) the termination of the Employee's employment
with the Corporation by the Employee; (ii) the term "Vesting
Date" means the first to occur of (A) December 31, 2006, (B)
the death of the Employee, (C) the Employee's Disability, (D)
the termination by the Corporation of the Employee's
employment with the Corporation otherwise than for cause, (E)
the sale, merger, consolidation or reorganization of or the
sale of substantially all of the assets of the Corporation,
(F) the effective date of a public offering of the
Corporation's Common Stock registered under the Securities Act
of 1933, as now or subsequently in effect (the "Securities
Act") in which the Restricted Shares have been registered for
sale or (G) the first date as of which, pursuant to Rule 144
under the Securities Act, the Restricted Shares may be
publicly offered and sold by Employee without registration
under the Securities Act and without any limitation or
restriction, including any limitation as to volume or manner
of sale; and (iii) the term "Disability" means the inability
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months, as determined by the Board of Directors of the
Corporation in good faith. For purposes of this Section 13,
"cause" for termination of Employee's employment shall have
the meaning set forth in Section 7.5.
13.3 By giving notice to the Employee, the
Corporation at any time: (i) may require that any or all of
the certificates or other instruments or property evidencing
or constituting any or all of the Restricted Shares or any or
all Restricted Share Distributions then subject to forfeiture
be held in escrow by a bank or other institution, or by the
Corporation itself, until the Vesting Date; (ii) may require
that the Employee deliver a stock power or other instrument
endorsed in blank relating to any Restricted Shares held in
escrow; and (iii) may require that any and all Restricted
Shares be held in the name of such escrow agent (in such
capacity) as registered or record owner. Any Restricted Shares
and Restricted Share Distributions held in escrow which no
longer are subject to forfeiture (as determined pursuant
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to Section 13.2 hereof) will be delivered out of escrow to the
Employee within a reasonable time after the applicable Vesting
Date, subject to Section 13.12 of this Agreement and the
satisfaction by the Employee of applicable federal and state
securities laws and withholding tax requirements, including
any federal, state or local withholding taxes. Subject to
Section 13.12 of this Agreement, any Restricted Share
Distributions which are not held in escrow may be received and
retained by the Employee free of the restrictions and
forfeiture provisions of this Section 13.
13.4 Except as provided by this Agreement, prior to
the Vesting Date, the Employee will not transfer or otherwise
dispose of any Restricted Shares which are subject to
forfeiture or transfer or dispose of any such Restricted Share
Distributions held in escrow pursuant to Section 13.3 or in
pledge pursuant to Section 13.12, and any such attempt to
dispose of or transfer any such Restricted Shares or
Restricted Share Distributions will be void and ineffective
for all purposes. Each stock certificate or other instrument
evidencing Restricted Shares subject to forfeiture will bear
the following legend:
SHARES OF THE CORPORATION REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A EMPLOYMENT AGREEMENT
DATED AS OF AUGUST 1, 1990 AND AS AMENDED AS OF
SEPTEMBER 25,.1996 WHICH CONTAINS PROVISIONS
RESTRICTING TRANSFER OF SUCH SHARES, REQUIRING SUCH
SHARES TO BE FORFEITED TO THE XXXXXX GROUP, INC. IN
CERTAIN CIRCUMSTANCES AND OTHER MATTERS. A COPY OF
SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
The words "transfer" and "dispose" include the making of any
sale, exchange or other transfer or disposition of any
ownership interest whatsoever with respect to the Restricted
Shares or subject to the last sentence of Section 13.3,
Restricted Share Distributions. Subject to Section 13.12,
nothing in this Section 13.4 will prevent the transfer or
other disposition, without consideration, of Restricted Shares
or Restricted Share Distributions to a personal representative
of the Employee or to one or more members of the Employee's
immediate family or to trusts or similar entities for their
benefit; provided, however, that in the case of such a
transfer, each transferee must agree in writing to take such
Restricted Shares or Restricted Share Distributions subject to
the forfeiture provisions described above and to be fully
bound by this Section 13. As used in this Agreement, the term
"personal representative" will mean the executor or executors
of the will or administrator or administrators of the estate
and all other legal representatives (by operation of law or
otherwise) of the Employee.
13.5 Whenever any Restricted Shares become free of
the rights and restrictions imposed by this Agreement,
including any pledge pursuant to Section 13.12, the holder of
such Restricted Shares will be entitled to receive a
certificate or
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certificates not bearing the restrictive legend provided for
in Section 13.4. If the certificate(s) evidencing such
Restricted Shares are not held in escrow pursuant to Section
13.4, then the holders thereof must deliver them to the
Corporation in order to receive the unlegended certificate(s)
contemplated by this Section 13.5.
13.6 The Employee represents and warrants that he
will be acquiring the Restricted Shares to be acquired by him
pursuant to this Agreement for his own account and not with a
view to reselling or distributing all or any part of the
Restricted Shares in any transaction which would constitute a
"distribution" within the meaning of the Securities Act. The
Employee acknowledges that the Initial Shares have not been,
and it is likely that any other Restricted Shares will not be,
registered under the Securities Act; that the Corporation
neither is obligated nor intends to effect such registration;
that absent such registration (or an exemption from
registration), the Employee may be required to hold the
Restricted Shares for an indefinite period of time; that the
exemption from registration under the Securities Act provided
by Rule 144 promulgated under the Securities Act likely will
not be available to the Employee; and that even if available,
such Rule would permit resales of the Restricted Shares only
in limited amounts and upon compliance with the terms and
conditions of such Rule.
13.7 The Employee agrees that the certificates
evidencing Restricted Shares to be registered in the name of
the employee will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER
SUCH ACT IS IN EFFECT WITH RESPECT TO SUCH SECURITIES
OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
APPLICABLE.
13.8 If at any time the Board of Directors of the
Corporation determines, in its discretion, that the listing,
registration or qualification of any Restricted Shares (other
than the Initial Shares) issuable pursuant to Section 13.1 or
otherwise upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of or
in connection with such issuance, then such Restricted Shares
need not be issued unless such listing, registration,
qualification, consent or approval shall leave been effected
or obtained free of any conditions not acceptable to the
Corporation's Board of Directors. The Corporation in no event
will be obligated to issue any Restricted Shares in any manner
in contravention of the Securities, Act or any state
securities law; provided, however, that if the Corporation
does not issue such Restricted Shares for the reasons set
forth in this sentence or the prior sentence, it will
substitute a distribution of cash or other property to
compensate for the failure to issue such Restricted Shares.
The Board of Directors of the Corporation may, in connection
with any issuance of Restricted Shares (other than the Initial
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Shares) pursuant to Section 13. 1, require that, as a
condition precedent to such issuance, in whole or in part, the
Employee make written representations to the effect set forth
in Section 13.1 and also may impose such other terms and
conditions as the Corporation's Board of Directors may
reasonable, require in order to cause such issuance to comply
with all applicable laws.
13.9 The Employee will make appropriate arrangements
with the Corporation for any taxes which either of them is
obligated to collect in connection with any issuance, payment,
distribution, transfer or disposition of any Restricted Shares
or Restricted Share Distributions. including any federal,
state, or local withholding taxes (but excluding any stock
transfer taxes payable in connection with the transfer by the
Corporation of the Initial Shares to the Employee, which taxes
will be paid by the Corporation), and the Corporation, as
applicable, will be entitled to withhold from amounts or other
consideration payable or issuable to the Employee under this
Agreement or otherwise such amounts as may be required by
applicable law.
13.10 Subject to Sections 13.1 through 13.9, the
Employee will have, with respect to each type or class of
Restricted Shares, all rights of a holder of Restricted Shares
of such type or class, including, without limitation, voting
rights and rights to receive dividends or other distributions
with respect to the Restricted Shares.
13.11 The Corporation may refuse to effect the
transfer by the Employee or any subsequent holder (except as
otherwise expressly contemplated hereby) of any of the
Restricted Shares on its books during any period in which such
Restricted Shares are subject to forfeiture to the Corporation
as set forth in Section 13.2 hereof. A copy of this Agreement
shall be filed with the Secretary of the Corporation.
13.12 If, at any time or from time to time while the
Employee continues to be employed by the Corporation pursuant
to this Agreement, any federal, state or local income taxes
shall become due and payable by Employee by reason of the
grant, issuance or delivery by the Corporation of Restricted
Shares to Employee or by reason of any compensation under this
Agreement which was earned by, Employee after December 31,
1992 and prior to September 1, 1996 but the payment of which
was deferred, then provided that no Forfeiture Event shall
have occurred, the Corporation shall, if requested by
Employee, make loans to Employee for the purpose of permitting
Employee to pay such taxes, subject to the following terms and
conditions:
(i) the amount of any such loan shall not exceed the
net amount of such federal, state and local income taxes which
are then or which will within 14 days after such loan is made
become due and payable by Employee, calculated after taking
into account all credits to which Employee is entitled by
virtue of any amounts (including taxes, interest and
penalties) which the Corporation has withheld or otherwise
paid or for which the Corporation is liable with respect to
the event which results in such taxes, and the proceeds of
such loan shall be used solely for the payment of such taxes
when or before due.
(ii) at the time the Corporation is to make any such
loan (a) a petition seeking liquidation, reorganization or
other relief with respect to Employee or his debts has not
been filed under any bankruptcy, insolvency or other similar
law or hereafter in effect, (b) relief has not been granted
with respect to Employee or his debts in any case or
proceeding for liquidation, reorganization, or otherwise under
any bankruptcy, insolvency or other similar law now or
hereafter
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in effect, (c) a trustee, receiver, liquidator, custodian or
other similar official has not been appointed (either with or
without the consent of Employee) for any substantial part of
Employee's properties, (d) Employee has not been adjudicated
to be insolvent, and (e) Employee has not made a general
assignment for the benefit of his creditors.
(iii) Each such loan shall be evidenced by a note
payable to the order of the Corporation and executed and
delivered by Employee and shall be secured by a perfected,
first priority security interest in and pledge of Restricted
Shares then existing or thereafter acquired which shall have a
fair market value, determined on the date such loan is made
and on a semi-annual basis thereafter, of not less than the
principal amount of such loan and such note and the documents
and instruments by which such security interest is granted and
such pledge is made shall be in customary form and contain
customary provisions (including, without limitation,
provisions regarding events permitting acceleration of the
maturity of such note), in addition to any other provisions
which the Corporation may reasonably request. As contemplated
by the foregoing, the fair market value of the Restricted
Shares securing each such loan shall be determined on a
semi-annual basis and the number of Restricted Shares held in
pledge by the Corporation as security for such loan shall be
adjusted as necessary so that fair market value of such
Restricted Shares shall be at least equal to the principal
amount of such loan. Each such loan shall be without recourse
to Employee or his property, other than all Restricted Shares
and Restricted Share Distributions then existing or thereafter
acquired, together with all proceeds thereof, substitutions
therefor and replacements thereof.
(iv) Each such loan shall bear interest at a
fluctuating rate per annum at all times equal to the rate of
interest publicly announced from time to time by The Bank of
New York, as its prime rate in effect at its principal office
in the City of New York, State of New York, and such rate of
interest shall change when and as such prime rate changes.
Accrued interest will be payable quarterly in arrears.
(v) The entire principal amount of each such loan,
together with any accrued and unpaid interest thereon, shall
become due and payable on the first to occur of (a) the first
anniversary of the termination of Employee's employment with
the Corporation for any reason, (b) the fifth anniversary of
the date of the first such loan or (c) acceleration in
accordance with the terms of the note contemplated by clause
(i) above. The terms of each such loan shall provide that in
the event of any sale, transfer, exchange or other disposition
by Employee of shares of capital stock of the Corporation for
cash or other consideration, Employee shall promptly make a
prepayment of such loan in an amount equal to the lesser of
(x) the amount of such cash or the fair market value of such
other consideration or (y) the then outstanding principal of
and accrued but unpaid interest on such note.
4 Except as amended or modified hereby, the Agreement as
amended shall remain in full force and effect.
5 This Amendment to Employment Agreement may be executed in
two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
6 All capitalized terms used in this Amendment to Employment
Agreement shall leave the definitions set forth in the Employment
Agreement.
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IN WITNESS WHEREOF, each party hereto has executed this
Amendment to Employment Agreement as of the date set forth above.
THE XXXXXX GROUP. INC
By:
--------------------------------
Name:
Title:
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Xxxxxx X. Xxxxx
